"Meatland" will build a slaughter-house in regions. Meat Market Consolidation will cut number of companies several times

18.01.2007 Business Petersburg

Joint-Stock Company "Meatland Food Groups" will invest $15 million in cattle slaughter enterprise construction in Kursk region. Similar projects will also be realized in other regions.

Joint-Stock Company "Meatland Food Groups", Petersburg largest meat supplier, will start a slaughter-house in Solntsevskom area of Kursk region in a year.

"About $4,5 million are already invested into the project. At present they are considering whether the slaughter-house will process only pork or also include a beef shop. But even without it the investment volume will make $12-15 million. The capacity is 1 million heads per year, it is about 70 thousand t of pork", - Dmitry Gordeyev, Joint-Stock Company "Meatland Food Groups" general director said.

Means for the manufactures opening in regions will also come from the bonded loan for the sum of 1 billion roubles which will be placed in February. "We’ve chosen Kursk region because of the plenty of pig-breeding enterprises where and because it’s not far from Moscow", - Dmitry Gordeyev points out. Joint-Stock Company "Meatland Food Groups" is already negotiating with authorities of 27 regions from which they will choose the most suitable for expansion in the nearest half a year. The arrival to regions means construction of a slaughter-house which will allow working with local raw material, of a distribution centre and distribution organization. At present "Meatland Food Groups" finishes creation of a similar chain in the Northwest. The distribution centre is already constructed, a slaughter-house with the capacity of 140 t per day at the meat processing factory (former "Econom") belonging to the company will be finished in 7-8 months.

Reduction
According to Dmitry Gordeeva, by 2009-2010 Russian meat market will be controlled by no more than 10-15 national companies instead of several hundreds, and Joint-Stock Company "Meatland Food Groups" task is to enter their number by way of the manufacture increasing several times. According to Russia Statistics Agency, Russian meat market volume makes about 6 million t, predicted growth is 10% per year. Joint-Stock Company "Meatland Food Groups" has provided 76 thousand t in 2005.

"Many companies working in the meat market are really joining now. The market depends on import, and it is affected by quotas which many prefer to unite (abroad it is more profitable to buy goods in large consignments). Therefore consolidation process will continue in the natural way.
How soon it will take place and how many players will remain is another question. For example, if the number of pork importers has reduced this year, the number of beef importers has grown. It happens because the demand for meat grows faster than local manufacture volumes and meat is imported even by the companies having no quotas, notwithstanding that it is much more expensive", - Vladimir Hrenov, Joint-Stock Company "Diet - 18" general director thinks.
Dmitry Gordeyev, Joint-Stock Company "Meatland Food Groups" general director thinks that not more than 15 companies instead of several hundreds will remain in the meat market in 3 years. The program of development will allow "Meatland" not to get in the number of outsiders.

Note

- According to its own estimations, Joint-Stock Company "Meatland Food Groups" accounts for about 20% of Petersburg meat market, its main competitors are Joint-Stock Company "Diet - 18" and "Rubezh" Group of Companies.

- In 2007 the group of companies plans to double its proceeds volume by entering Moscow market. Joint-Stock Company "Meatland Food Groups" turnover made more than 6 billion roubles in 2006, 15% more than in 2005.

Rahnova Margarita